Is there a relationship between demand for building materials (in hundreds of dollars per capita) and 2 variables: mortgage rate (in percent) and location (Los Angeles = 0 and San Francisco = 1)? A researcher thinks so, and believes that the appropriate model is Demand = 10 + 5 * Mortgage rate + 8 * location The predicted demand in Los Angeles when the mortgage rate is 8% is ________.
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Demand = 10 + 5 * Mortgage rate + 8 * location Since we are looking for the predicted demand in Los Angeles, we substitute location as 0. Demand = 10 + 5 * Mortgage rate + 8 * 0 Since the mortgage rate is given as 8%, we substitute Mortgage rate as 8. Demand Show more…
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